Tags: Europe | stocks | Germany | earnings

European Stocks Rise as Output, Confidence Data Outweigh Earnings

Thursday, 23 October 2014 02:21 PM

European stocks advanced for a third day as better-than-expected euro-area manufacturing and consumer confidence data outweighed disappointing earnings from companies including Michelin & Cie.

The Stoxx Europe 600 Index rose 0.7 percent to 328.26 at the close of trading. The gauge, which earlier lost as much 1.1 percent on worse-than-forecast corporate results, was boosted by a report showing Germany led euro-area manufacturing back to growth this month. It extended gains after the euro-region sentiment data beat forecasts.

“We’re actually pretty positive on the global-growth picture,” said William Hobbs, the London-based head of equity strategy at Barclays Plc’s wealth-management unit. “The U.S. is capable of growing at a faster pace and eventually the rest of the world will feel the warmth. Europe will just continue to make slow progress and nothing has massively changed.”

A purchasing managers index for euro-area manufacturing rose to 50.7 in October from 50.3, Markit Economics said. Economists surveyed by Bloomberg News predicted a drop to 49.9. A reading below 50 indicates contraction. A similar measure for Germany showed manufacturing in the region’s largest economy rebounded from last month’s contraction.

European equities had led a rout that erased as much as $5.5 trillion from the value of shares worldwide amid speculation that the European Central Bank’s stimulus measures will not be enough to spur growth. Investors are analyzing economic data to gauge the health of the economy after the International Monetary Fund said this month that the euro region risks falling back into recession.

Consumer Confidence

A report from the European Commission showed a better-than- forecast euro-area consumer confidence reading for October. The flash reading of minus 11.1 compared with the average prediction for minus 12.

In the U.S., data showed fewer Americans filed applications for unemployment benefits over the past month than at any time in 14 years.

National benchmark indexes advanced in 16 of the 18 western-European markets today. Germany’s DAX Index climbed 1.2 percent, France’s CAC 40 Index increased 1.3 percent, and the U.K.’s FTSE 100 Index added 0.3 percent.

Nokia Oyj, which sold its mobile-phone business to Microsoft Corp. last year, gained 3.5 percent to 6.74 euros. Third-quarter profit excluding some items rose to 9 euro cents a share from 6 cents a year earlier. Analysts had predicted 6 cents on average. Sales increased 13 percent to 3.3 billion euros ($4.17 billion), more than the 3 billion-euro estimate.

Logitech Gains

Logitech International SA jumped 6.6 percent to 12.90 Swiss francs after reporting quarterly earnings climbed. Novozymes A/S rallied 8.2 percent to 262.20 kroner after raising its forecast for 2014 profit growth. Pernod Ricard SA advanced 2.2 percent to 88.41 euros after saying organic sales rose more than estimated.

Tesco Plc fell 6.6 percent to 171 pence. The biggest U.K. grocer said previous profit estimates were overstated by 263 million pounds ($421 million). Tesco had said initially that an estimate of first-half profit was inflated by about 250 million pounds. It also announced that Chairman Richard Broadbent is preparing to leave.

Michelin & Cie. retreated 4.9 percent to 67.04 euros after saying third-quarter sales dropped 4.6 percent to 4.89 billion euros. That missed the 5.01 billion euros projected by analysts. Annual-volume growth will be 1 percent to 2 percent, Michelin projected, down from an earlier forecast of 3 percent growth. A measure tracing stocks of auto-related companies fell 0.4 percent.

Unilever fell 2.7 percent to 29.48 euros after the maker of Dove soaps said underlying sales rose 2.1 percent in the third quarter. Analysts had predicted growth of 3.9 percent. Unilever forecast difficult market conditions for the rest of the year.

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European stocks advanced for a third day as better-than-expected euro-area manufacturing and consumer confidence data outweighed disappointing earnings from companies including Michelin.
Europe, stocks, Germany, earnings
Thursday, 23 October 2014 02:21 PM
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